Why are European Commission antitrust authorities bending over backwards to settle with Google?
The EU’s apparent preference for settling, rather than prosecuting Google for antitrust violations, turns a blind eye to Google’s proliferating abuse of its dominance.
Last week Canada’s Competition Bureau announced its investigation has found three new ways that Google maybe abusing its dominance. Those three are above and beyond the four abuses of dominance that the EU already has found. In turn, those four were more abuses of dominance than the U.S. Federal Trade Commission found in its earlier investigation.
Canadian authorities allege Google is abusing its dominance by raising advertiser prices via forcing participation in Enhanced Campaigns, by foreclosing competition via exclusive Android deals, and by abusing YouTube’s dominance to foreclose other mobile platforms.
In addition to the EU’s four alleged search-related abuses of dominance, the EU has issued a Statement of Objections that Google-Motorola has misused mobile-phone standards-essential patents.
Moreover, the EU is investigating Google-Android’s anti-competitive behavior, and European publishers are charging that Google’s search behavior is anti-competitive towards European media.
Google’s dominance is also not going away; it is proliferating at an accelerating rate. Google reached a billion users via searches in 13 years, Google Maps in 9 years, YouTube in 8 years, and Android in 5 years. Google+ will likely reach a billion users in an estimated 4 years.
Google’s rapidly spreading dominance and allegations of dominance abuse make it by far the largest, broadest, fastest-spreading, and potentially most harmful dominant firm in EU history. Never before has one company had more power to dictate what people find online, the value of Internet content, and which online businesses prosper or fail.
Google’s EU privacy and data protection abuses are also growing.
Multiple EU nations objected to Google’s secret Street View eavesdropping on private home WiFi signals. Many currently are fining, or preparing to fine Google for its privacy policy changes that flout EU data protection law.
Concerning abuses of other EU laws, EU nations have found Google to be among the most aggressive companies in the world at evading EU taxes. And Google has earned more copyright and patent property infringement charges than any company in the world.
Simply put, there is no other company that the EU has more law enforcement problems with than Google.
In that well-known context, it is astounding that the EU is even entertaining a Google-proposed absolution settlement that would require the EU to “confirm there are no grounds for further action.”
If approved, the settlement would make many extraordinary unwarranted concessions to Google.
The EU would allow Google to continue illegally diverting traffic and preferring Google content.
The EU would absolve Google of any wrongdoing for abusing its dominance in four ways.
The EU would not conclude Google’s greater-than 90 percent share is dominance even though the EU’s standard dominance threshold for other companies is 39.7 percent.
The EU would exempt Google from any fine and the standard EU legal obligations of dominant firms, i.e., “A special responsibility not to allow its conduct to impair competition on the common market.”
The EU would even permit Google to continue to extend its dominance into other markets without limit.
In sum, the EU’s continued interest in settling with Google generates many more questions than it answers.
Why would the EU lean towards the most lenient process and treatment for the most dominant, and potentially the most abusive dominant, company the EU has ever investigated?
Why would the EU consider minimizing and not maximizing its law enforcement authority and deterrence when it knows the Google dominance abuse problem is not going away, but actually is spreading and getting much worse?
How would Google have much incentive to fully comply with the proposed settlement if the EU agrees to shut down its current investigations before, and not after, Google has fully complied with the proposed settlement?
How would a settlement deter future Google abuses of dominance when the proposed settlement does not conclude Google’s 90 percent share is dominant; include an admission of, or responsibility for, wrongdoing, or preclude future illegal abuses?
What part of Google’s first two settlement proposals’ delays, deceit, and deficiencies, inspire EU confidence that Google would promptly and fully comply with its proposed settlement?
In short, why isn’t the European Commission prosecuting Google?
Scott Cleland is President of Precursor LLC, a consultancy serving Fortune 500 clients, some of which are Google competitors. He is also author of “Search & Destroy: Why You Can’t Trust Google Inc. Cleland has testified before both the Senate and House antitrust subcommittees on Google and also before the relevant House oversight subcommittee on Google’s privacy problems.